Products

1
Products

• David Forlani
• University of Colorado at Denver and Health
  Sciences Center

2
Overview

• Product Strategy
• Defining Products
• The Role of Branding
• Distinguishing Goods and Services
• Assessing Satisfaction
• Measuring Service Quality

3
Product Strategy

• The element of the firms marketing mix that is
  most responsible for meeting the needs and wants
  of its target markets.
• Product decisions able to deliver superior
  customer value are the most effective.

4
Product Strategy Considerations

• Have a clear understanding of the target market
  and the positioning objectives.
• Know what the product communicates to the market.
• Take a holistic view of current and potential
  competitor offerings.
• Determine the products role in providing
  satisfaction.

5
Products Defined

• Anything that satisfies a need or want.

6
Products Exist at 3 Levels. What it does, Is
Its external attributes
Channel services -- delivery, installation,
repair, training
Augmented Product
Warranty Financing
Packaging
Actual Product
Product features, brand and quality
Core Benefit
The need satisfied
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Differentiating Features Benefits

• Products consist of features.
• Consumers buy benefits.
• Why do people buy drills?
• Why do people go to college?
• Why do people buy vehicles with AWD?
• Marketers must translate between engineers and
  customersfeatures ? benefits.
• Marketing must take a proactive role in the
  Development portion of RD.

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Product Classes Their Strategies
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Brands

• Often legal, identify products through name,
  symbol or design.
• Images obtained are influenced by a firms
  positioning activities and the degree of value
  customers perceive in its products.
• Convey price, quality and status info.
• Are intended to simplify the purchase decision
  process.

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Branding Strategies

• None (generics)
• Private label / Retailer
• Lucerne, Kirkland
• Individual
• Tide, Gain, Mr. Clean
• Family
• DODGE Durango, Caravan, Neon
• Co-branding
• Eddie Bauer Explorer (SUV), Qwest Kyocera (Cell
  phone).

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Branding

• When well executed, branding moves users from
  recognition to preference to insistence.
• When not, problems arise.
• Pontiac Banshee, sporty car
• Banshee is a female spirit that wails outside a
  house indicating that a death will occur.
• Reebok Incubus, womens running shoe
• Incubus is a mythical demon who has sex with
  women in their sleep.
• Chevy Nova, car marketed in South America
• In Spanish, No va, means doesnt go.

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Branding

• Brands are market-based assets.
• The Worlds most valuable brands include
• Coca-Cola (72B), McDonalds (28B), IBM (53B)
  and ATT (26B).
• How can their value be estimated?
• Build up and comparative methods

13
Branding Practices

• GM Never give up.
• Rides Oldsmobile into the grave.
• Acura Copy Mercedes.
• Eliminated the Legend and Vigor brand names in
  favor of the initials RL and TL.
• Ford Change is good.
• Aerostar, then Windstar, now Freestar minivans.
• Suzuki Forget pedigree, what sounds good
• The Forenza A Japanese brand, designed in Italy,
  built in Korea by GM-Daewoo and sold in the US
  through Suzuki dealers.

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Brand Character (article qs)

• Volkswagen
• What is the relationship among branding,
  positioning and the marketing mix?
• Saab
• What is the relationship between a brand and the
  product so designated? Who decides its character?
  What is Saabness?

15
Major Types of Products

• Goods Give customers things.
• Services Give customers time, expertise or
  access to knowledge.
• Ideas Give customers ways of thinking about
  something.

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Dimensions of Product Quality

• Performance
• Conformance
• Features
• Durability
• Reliability
• Serviceability
• Esthetics
• Perceived Quality

How well does the washing machine wash
clothes? How well will the SUV haul my 7,000 lb.
trailer? Does an airline flight offer a movie
and dinner? How long will the lawn mower
last? Will the restaurant be as good on my next
visit? How often will the lawnmower be in the
shop? Is the product easy to service? Is the
service system efficient, competent, and
convenient? Do I like the look/feel/sound/smell
of the product? Is this a brand that I
identify with and can afford?
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Good - Service Differences Intangibility

• Difficult for Customers to Evaluate.
• Firm Sells Promises to Perform.
• Difficult to Advertise and Display.
• Prices are Difficult to Set and Justify.

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Good - Service Differences Perishability

• Services cannot be inventoried.
• Unused capacity is lost forever.
• Demand is very time sensitive.
• Difficult to balance supply and demand.

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Good - Service Differences Degree of Personal
Involvement

• The customer is an integral part of many service
  experiences and outcomes.
• Service employees are essential to service
  delivery.
• Training and motivation of employees is critical.
• When non-interpersonal services fail, subsequent
  contact with humans is expensive.

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Good - Service Differences Variability

• Service quality is difficult to control.
• Service delivery is difficult to standardize.

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Evaluating Service Quality

• Tangibles
• Reliability
• Responsiveness
• Assurance
• Empathy

Appearance of physical facilities, equip.,
personnel, and communications materials. Ability
to perform the promised service dependably and
accurately. Willingness to help customers and
provide prompt service. Knowledge and courtesy of
employees and their ability to convey trust and
confidence. Caring about and understanding of
individual customers needs.
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Assessing Customer Satisfaction

• Satisfaction
• is the act of satisfying.
• Satisfying
• is to fulfill the desires, expectations, needs
  or demands of a person.
• Expectancy Disconfirmation Model
• Satisfaction Actual outcomes Expected
  outcomes.

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Expectancy Disconfirmation

• Actual outcomes Expected outcomes
• When the equation zero
• Confirmation Customer is satisfied.
• When the equation 0
• Positive Disconfirmation Customer is delighted.
• When the equation
• Negative Disconfirmation Customer is
  dissatisfied.

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GAP Model
Word-of-mouth communications
Personal needs
Past experience
Expected service
Customer
Gap 5
Perceived service
Service delivery (including pre and post contacts)
External communication to consumers
Gap 1
Gap 3
Gap 4
Marketer
Translation of perceptions into service quality
specs
Gap 2
Mgmt. perceptions of consumer. expectations